Avexis Incorporated: Then and Now
Avexis Inc. is a clinical-stage gene therapy company. It engages in the development and commercialization of novel treatments for patients suffering from rare and life-threatening neurological genetic diseases. The company was started in 2010. Its headquarters are in Illinois, USA. Currently, the biotech company has 18 employees.
The company’s primary product is AVXS-101. The product is, according to Avexis “a proprietary gene therapy candidate of a one-time treatment for SMA Type 1 and is designed to address the monogenic root cause of SMA and prevent further muscle degeneration by addressing the defective and/or loss of the primary SMN1 gene.” This means that the product treats Spinal Muscular Atrophy, a leading cause of infant mortality. AVXS-101 is currently in Phase 1 of its clinical trials on patients. It has received orphan designation for treating all types of SMA and fast track designation for treating SMA Type 1. The product has also qualified for accelerated review within the EU.
Avexis Inc. went public on February 11th of last year. It sold 4.75 million shares during its release. Each share was priced at $20. The IPO raised a total of $95 million. Business valuations gave a report that Avexis was then valued at $430 million after its offering. The underwriters for the deal were Goldman Sachs and Jeffries LLC.
Investors were positive on getting into this IPO trade because of the high success of BGNE’s IPO the previous week. BGNE is a gene-therapy company, and thus investors were hopeful this biotech company would have the same success story. Furthermore, the possibility of the company finding a cure for SMA types 1 and 2 was very attractive to investors.
On the first day of its trade in the markets, Avexis stock opened at $18.02. This cost was 10% lower than its issuance price. However, Avexis stock bounced back soon after and began a rise through the markets. The company planned to use the money it gained from the IPO to fund the phase 1 trial of AVXS-101 and future clinical trials. The expansion of research has been shown by Avexis’ operations ongoing in Europe.
As of March 1st, 2017, the stock for Avexis Inc. stood at $64.90. This $3.58 increase translated to a 5.83% growth for the company’s stock. However, many analysts are skeptical of Avexis’ performance in 2017. A report from Citroen Research dated December 14th last year described the company as “The Next Biotech Blowup.” Further, investors are in suspicion of the company’s administration. Avexis’ founder John Carbona was sued for fraud at the company he previously worked for. Furthermore, the research done by this company on AVXS-101’s performance was at a single center.
Additionally, analysts are in the view that the only sole reasons for an increase in price in the company’s stock are the fact that medication in the USA is very expensive as well as high demand for the stock due to the possibility of AVXS-101’s ability to cure SMA. The company’s stock is being considered unsustainably overpriced. Worse off, biotech competitors Biogen and Ionis had its Nuseinersen Therapy meet all primary endpoints for a phase 2 study without safety or tolerability concerns. Phase 3 data was released soon after, showing the treatment also met its primary endpoints for motor milestone response and survival. The fact that the competition has already discovered a cure is detrimental to Avexis’ success.
Citroen Research predicts this company’s stock will be trading at $9 in the next one year and $5 in the next biennium.
The markets are highly skeptical of Avexis’ success despite rising share value. Since the IPO, no significant milestones have been achieved by this company. Most are speculations, and fundamental facts and figures to support the company’s progress have not been tabled. Transparency and the release of a formidable cure for SMA would do Avexis well in 2017.